A credit card processing machine works by detecting the card inserted by a user. Swiping a card over the reader slot allows the machine to automatically read the information in the magnetic strip or chip including the credit card number and the cardholder’s name as well as other personal information. This information is acquired by the credit card machine and prepared for transfer.

Transmitting the Data
Credit card machines are designed to transfer the data they collect to the credit card processor. The software in the machine merges the merchant’s identification number and name with the cardholder’s data. Credit card terminals then transfer this information to the processor’s server through an Internet connection.

Approving the Transaction
Once the card has been swiped and its information processed, the machine either accepts or rejects the transaction. If accepted, the transaction receives an exclusive approval number that ascertains the specific purchase. The machine electronically confirms that the amount used does not exceed the card’s limit, that the user is the right cardholder, and that the card has not expired. Generally, the whole process takes 3 to 5 seconds. Once the transaction has been approved, the credit card machine starts processing receipts on its internal printer with details of the transaction.

Types of Credit Card Swipe Machines
The credit card has a strip with negative and positive charges. The Credit Card Processing machine interprets the charges as a series of zero and one in a binary code. The information in the credit card is transferred to the computer, which changes the binary code into digits.

Once the credit card processing machine reads the data in a card, it transfers the information to the cardholder’s bank through a telephone line. The bank then confirms whether there is enough cash for the transaction or not. This is when you will know if your credit card is accepted or not

A credit card processing machine is part of a central processing unit and can be hacked into or be affected by malicious applications and spyware. This may result in fraud and identity theft. Unscrupulous sales clerks can also use cardholder’s data to commit crimes.

The standard price of a credit card processing machine is approximately $350 including a printer. However, Installation fees are not included in this quotation. A printer is an essential component of the credit card processing machine because it enables users to get receipts with details of their transactions.